Healthcare leaders across the country are facing a common challenge: billing teams are struggling to keep pace with mounting financial pressure and operational demands.

Armed with cutting-edge AI, payers are denying claims at an increasing rate as provider operating costs (including the costs to attract and retain skilled workers) are way up. Meanwhile, patient responsibility is climbing, and outdated billing workflows leave patients confused and increasingly unlikely to pay. Still, revenue cycle management (RCM) teams are expected to deliver margin improvement and operational efficiency gains.

With slow and inconsistent paths to reimbursement across the entire revenue cycle, and billing teams already overwhelmed by existing workloads, resolution via change management may be out of reach.

For this reason, adding technology is often the most sensible path. Healthcare leaders typically find themselves evaluating two potential routes to improve outdated RCM workflows:

• Build a custom solution in-house
• Invest in specialized third-party RCM software

When staying the course is financially unsustainable, but each path to a potential solution carries significant risk, the decision to build, buy, or use EHR-based RCM is an inflection point for the enterprise.

In this guide, we’ll dig deeper into these three options, as well as the factors that should guide the build vs. buy decision for healthcare RCM.

Financial Impact: Calculating Build vs. Buy Costs for RCM

This decision will affect your organization’s financial health in multiple areas of operations:

• Changes to revenue cycle workflows: affects margins, cash flow, patient throughput, and collection & reimbursement rates
• Cost management and budgeting: upfront capital investments weighed against long-term operational expenses
• Risk mitigation: impacts your resilience to regulatory penalties, operational disruptions, a shifting payer & policy landscape, and staffing challenges.
• Competitive positioning: investments may alter your organization’s market differentiation and growth opportunity

Model ROI and Financial Impact

Start with immediate financial impact (0-12 months). How does this affect quarterly cash flow and working capital? Does this fit within approved capital expenditure or operational expense limits? How quickly will ROI show up in financial statements?

From there, consider the strategic financial value (1-3 years). Will this investment improve competitive positioning? What's the quantifiable impact on operational efficiency, e.g. cost per patient or revenue per FTE? Can this investment support scaling up without proportional cost increases?

Lastly, weigh the impacts on long-term financial health (3-5+ years). Will this position you for future regulatory changes and emerging payment models? Does this investment align with trends of increasing patient responsibility and payer behaviors? Are you creating or reducing long-term technical debt? Can the team adapt or change course without significant financial penalty?

Calculate Opportunity Cost

One of the most important and overlooked aspects of choosing RCM software is the opportunity cost of the status quo. For most practices, this means sticking with out-of-the-box, EHR-only revenue cycle management. This typically means:

• Inability to meaningfully assess total revenue cycle health due to platform fragmentation and tech limitations
• Time-consuming manual workflows (calls, portals, faxes) for registration, eligibility verification, prior authorization, patient payment reminders, A/R, and claim management
• Front desk delays and bottlenecked cash due to broken intake & inability to collect pre-service
• Poor demographic and clinical documentation that causes errors, delays, charge capture bottlenecks, denials, and write-offs
• Clunky and outdated patient billing: confusing statements and inconsistent engagement resulting in friction throughout the patient payment process
• Engineering time consumed by maintaining (not growing) RCM, billing, and communication systems

Also consider the opportunity costs associated with one technology solution compared to others. Some systems take longer to implement or require more change management than others. Certain elements can be built or managed in-house, but is it the best use of that team’s time? Certain elements can be purchased, but can your organization prioritize the time required to implement the system, conduct training, and manage the change?

Every decision comes with an opportunity cost. Ensure the long-term solution you choose has enough benefit throughout the revenue cycle to justify the time and money invested.

Build vs. Buy vs. EHR-Only RCM: Key Decision Factors

When making this high-stakes RCM software decision, leaders must consider a variety of factors: regulatory requirements, patient needs, technical capabilities, integrations, and costs.

Buying Advanced RCM Software

Today’s RCM software offers AI and automation at nearly every stage of the revenue cycle, from eligibility & prior authorization to denial management, patient billing, & A/R. But new software can bring along integration complexity, vendor management challenges, and upfront costs that require budget approval.

Regardless of size or specialty, healthcare organizations are feeling the strain of chronic staffing shortages and industry-wide financial pressure. Working with a proven RCM software vendor helps providers navigate complex RCM regulations and patient-side workflows, and accelerate cash flow at the same time.

As revenue cycle specialists, RCM software providers build their business (from the product roadmap to the development team to customer support) around the revenue cycle. This focus means a deeper understanding of the revenue cycle challenges billing teams face every day, and an ongoing commitment to solving every exception possible with cutting-edge RCM technologies.

RCM vendors live and die by the depth of their customer relationships, which means a compelling use case from a health system or practice group can genuinely move the needle on their roadmap. Typically smaller in size than EHR vendors, these orgs are more focused, and more commercially motivated to solve your exact revenue cycle problems. When you bring a real operational pain point to a good RCM partner and say "we need this," there's a meaningful chance they'll actually build it. Not in three years, buried in a release note. But on a timeline that matters to your organization. In fact, if you're evaluating RCM solutions, it's worth asking vendors directly: can you show me examples of features you built because a customer asked for it? The ones with good answers are the partners worth talking to.

Advanced RCM systems deliver proactive revenue cycle management, patient-centric billing, and streamlined RCM workflows with AI and automation. RCM software helps providers analyze trends in financial data, claims submissions, and reimbursement processes — and identify issues that hold back patient collections.

When evaluating RCM software options, keep the following elements in mind:

• Lower costs for top-tier tech: Proven RCM software vendors amortize costly investments in technology infrastructure, security, compliance, and engineering talent across a large customer base — decreasing the per-provider cost to access top-tier RCM technology, while incentivizing continuous software improvement.
• Patient experience: Modern RCM systems also deliver a more patient-friendly billing experience. Leading patient billing software delivers clearer, accurate, and timely information to patients with better engagement practices, improving patient satisfaction and billing efficiency.
• Customization and adaptability: Advanced RCM software can support customized workflows, practice-specific processes, and organizational KPIs to support unique needs across different providers.
• Compliance and security: When it comes to purpose-built RCM software, practices can expect an ongoing commitment to security and compliance baked into software development.
• Strategic alignment with vendor roadmap: The technology provider’s product roadmap must be clearly communicated and align with the provider’s needs.
• Faster timelines & go-live support: Going live with vendors is usually faster than building software, especially if the vendor provides dedicated implementation resources.

Building Custom RCM Software

This route offers maximum control and customization, and can yield solutions optimized for in-house RCM teams and patients. However, a custom solution demands significant technical resources (staff and tools) not only to build, but to maintain, secure, and upgrade over time.

Meanwhile, healthcare IT departments are often already stretched thin by cybersecurity priorities, regulatory compliance, and core system maintenance.

Building in-house software requires a highly skilled development team and a long-term commitment to software maintenance, upgrades, security, compliance, and incident response planning. At a time when specialized software solutions are widely available for most needs, and speed to impact matters, it’s a tough sell for most healthcare providers.

The cost to develop and maintain compliant proprietary tools (especially  the cost to acquire and retain technical staff) is incredibly high.

Unless a healthcare provider will gain a unique technology differentiator, software development should generally remain a lower priority than reinvestment in clinical staff, patient services, facilities, and other basics.

In short, building a specialized RCM system in-house presents major financial risk. A complex custom development project traps organizations in perpetual cycles of maintaining, securing, and updating proprietary code instead of improving revenue operations.

Internal teams lack specialized RCM expertise, often overlooking critical payer-specific requirements and compliance nuances that cause costly claim denials. If key developers leave, institutional knowledge disappears and systems are vulnerable or unmaintainable. Recruiting and retaining in-demand engineering talent ($200k+ each annually) is an extremely high cost to balance with clinical staff, patient services, facilities, debt management, and other priorities.

Unlike vendors who amortize costs across many clients, providers alone bear the full burden of infrastructure, security incidents, and regulatory updates. Most critically: engineering resources devoted to RCM can't simultaneously address cybersecurity threats, EHR optimization, or other strategic IT priorities.

EHR-Only RCM

Most EHR/EMR systems natively offer at least rudimentary RCM functionality, with some offering additional features as add-ons. At first glance, EHR-only RCM may seem like the best fit: it’s built into your existing system, and if new features must be purchased, they usually seem cost-effective. But EHR-only RCM is not purpose-built. It lacks customization needed to handle exceptions, is missing advanced automation and AI capabilities, and tends to delay cash. In short, it often doesn’t perform as well as software built specifically for the revenue cycle.

Many healthcare providers start out with the basic RCM functions offered in their EHR/EMR/PM system. These built-in features excel at certain components of RCM, like leveraging clinical data for medical coding and billing to track charges and payments on a per-patient basis.

But effective RCM goes beyond monitoring charges out and payments in; it requires high-quality analytics, easy patient workflows, and workflow automations to accelerate cash flow—areas where EHR-based RCM usually falls short.

The RCM features built into the EHR/EMR system struggle to:

• Manage organization-specific complexities like patient/payer mix, claims processes, regional insurers, and benefits, creating the need for RCM services vendors or collections agencies to bridge the gap between EHR functionality and providers’ needs
• Deliver advanced reporting and data analysis, e.g. reactive instead of proactive RCM, lack of forecasting, predictive analytics, and trend analysis
• Offer support for reimbursement issues and patient billing questions,  as client support teams are focused on EHR-specific support requests
• Keep pace with advanced RCM technologies like RCM automation, AI trend analysis and outlier detection, and personalized patient communication at scale
• Adapt to changing organizational needs, e.g. bundled EHR and RCM services create vendor lock-in and increase switching costs and potential disruption when the organization needs to explore new systems

Revenue Cycle Software: A Business Decision

Deciding whether to build or buy software is increasingly critical as software costs rise and time-to-market pressures intensify.

Generally speaking, it makes sense to build when the tool represents core intellectual property/competitive advantage, or when the benefit of retaining strategic control outweighs the high costs of building, upgrading, and maintaining the platform. Building may also be the best solution when a provider has a highly unique technology need not addressed by existing technology offerings.

It generally makes sense to buy trusted third-party software when the feature is commonplace/table stakes in the industry, there are multiple competing vendors, there are high security and compliance requirements, and/or there are complex edge cases emerging. Technologies that require ongoing maintenance — which can cost 15-20% of initial development costs each year — are typically cheaper to buy, as vendors spread out these costs over a large customer base.

Build vs. Buy: Core Trade-Offs

Answering the following critical questions builds a business case for your strategic decision.

What are the Specific Problem(s) Needing Solutions?

The right solution depends on a clear definition of the problem: leaders need to know exactly what problems they're addressing before evaluating options. The Growth/Scale/Optimize (GSO) model is a common framework for identifying key business priorities: Growth (G): Attracting more customers or boosting revenue vs. Scale (S): Expanding services sustainably by five to 10 times, and Optimize (O): Enhancing profit margins or improving customer experience.

RCM challenges vary among providers: consider organizational structure, resources, patient populations, payer mix, and geographic context. However, there are recurring themes across theindustry:

• Low and slow reimbursement. Too much cash is stuck in A/R, and too much A/R is aging into bad debt.
• Errors and claim denials are too common. Mistakes in patient data, coding errors, missing prior authorizations, and documentation issues routinely cause claim rejections. This leads to costly, time-consuming rework; meanwhile, payers are doubling down on AI-powered tech investments to speed up claim reviews.
• Patient collections are increasingly difficult. Out-of-pocket spending per person has more than doubled (adjusted for inflation) since 1970. As patient costs rise, patient collection rates fall. With fewer funds available and new restrictions on supplemental payments, the financial situation looks dire, especially for rural providers and safety-net hospitals.
• Siloed or outdated systems prevent growth. When RCM systems are siloed from coding tools, EHR/EMR systems, and patient engagement tools, straightforward tasks require logging into multiple systems. A disjointed tech stack frustrates staff and introduces new opportunities forerror.
• Revenue cycle and admin teams are at capacity. Staffing shortages continue to strain the healthcare industry. Meanwhile, delays and inefficiencies in the RCM process are expensive, and a shortage of skilled medical coders, patient support staff, and RCM specialists creates operational bottlenecks that slow down payments.
• Repetitive manual tasks take too much time. Finance, AR, and patient access teams are spending too much time on time-consuming tasks. Rather than handling unique and complex situations, staff are bogged down by routine tasks: insurance eligibility verification per patient, posting payments individually, chasing down data entry errors, answering common patient billing questions, and managing payer-specific claim submissions requirements.
• Patients are frustrated with the billing process. Patients expect modern, digital-first experiences with price transparency, convenient payment options, and 24/7 support—but legacy systems cannot deliver this type of modern patient financial experience. Unclear patient statements and confusing payment processes lead to delayed payments, confusion, and dissatisfaction. As high-deductible plans shift more financial responsibility to patients, billing questions surge.

What is the Bigger Strategic Picture?

Faced with shrinking margins and declining reimbursements, healthcare organizations need to find the fastest path to better margins, but without sacrificing long-term strategy and financial stability.

Depending on the highest-priority issues, different solutions may be available. Some problems can be addressed by streamlining the RCM workflow, or by investing in recruiting, hiring, and professional development for staff. Adopting point solutions can help improve specific operational issues (e.g. a modern payment interface that layers on top of the existing RCM system to reduce friction in patient payments).

However, be wary of “fixing” discrete parts of the RCM process or one specific metric at the expense of a true end-to-end RCM strategy. Dig into related metrics and underlying causes of revenue issues to ensure the solution is a strategic improvement, not a temporary band-aid. In many cases, the capability offered by a point solution could be one element of a larger system that could make a larger positive impact across more RCM KPIs. If you’ll have to transition to a more comprehensive solution in 6-12 months, adopting a limited-scope system may not be worth the time and effort. This calculation is different for every provider.

Which Path Better Paces with Payer AI?

Payers are outpacing providers when it comes to advanced technology investments. Already, payers with established AI strategies are processing and denying claims faster than provider revenue cycle teams can analyze and respond. Major insurers like UnitedHealth, Humana, and Cigna have implemented algorithmic decision-making in their claims review processes — and more than three-quarters of payer IT leaders report they are actively enhancing tech capabilities for comprehensive AI deployment.

As tech advances at a breakneck pace, a provider with a substandard RCM stack is bringing manual tools to an automated fight. Even healthcare organizations with a skilled and well-equipped engineering team struggle with the actual costs — and opportunity costs — of the change: managing, training, governance frameworks, and quality assurance processes that accompany cutting-edge AI development for RCM.

Is There Strategic Alignment to the Vendor’s Product Roadmap?

The decision is not just whether to buy – it’s which solution to buy. The technology’s vendor’s product roadmap must be aligned with your organization’s evolving needs. When that alignment is missing, providers often see tools unable to keep pace with a rapidly shifting revenue cycle landscape.

To analyze the vendor’s development priorities, ask the right questions during the evaluation process:

• Cost-effectiveness: Is there clear return on investment (ROI)? Will the software scale with potential growth at your organization in the near to distant future?
• Regulatory compliance: Does the vendor proactively update their platform for regulatory changes (e.g. price transparency, 2025 Budget Reconciliation Law), or will your team need to build workarounds?
• Technology investments: What's the vendor's approach to emerging technologies like agentic AI? Are they investing in capabilities that will keep you competitive, or will you need to switch vendors in 18-24 months when the landscape shifts again?
• Integration strategy: What EHR/EMR/PM systems integrate with the software? As the healthcare provider’s tech stack evolves, will the technology vendor's integration capabilities keep pace?

When vendor roadmap and organizational strategy align, implementations succeed. When they diverge, it leads to suboptimal workflows or expensive migrations.

Making the Right RCM Decision

Modern healthcare organizations are facing significant financial pressures: declining reimbursements, rising operational costs, regulatory compliance expenses, and rising patient responsibility. As margins tighten, RCM becomes a key strategic investment.

What most organizations need is a solution that swiftly improves revenue and reduces operational drag.

Collectly is an AI-powered all-in-one RCM platform that takes 4–8 weeks from kickoff to go-live, thanks to pre-built bidirectional EHR integrations and a dedicated implementation lead.

We help 3,000+ medical facilities save 66% on costs to collect, reduce DSO to 12.6 days, boost patient collections by 2-3x, and streamline RCM workflows with AI agents built for billing and RCM.